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10 Cards in this Set
- Front
- Back
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Total utility
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the total satisfaction a consumer derives from consumption; it could refer to either the total utility of consuming a particular good or the total utility from all consumption.
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the total satisfaction a consumer derives from consumption; it could refer to either the total utility of consuming a particular good or the total utility from all consumption.
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Total utility
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Marginal utility
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the change in total utility derived from a one-unit change in consumption of a good.
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the change in total utility derived from a one-unit change in consumption of a good.
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Marginal utility
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Law of diminishing marginal utility
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the more of a good a person consumers per period, the smaller the increase in total utility from consuming one more unit, (o.t.c.)
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the more of a good a person consumers per period, the smaller the increase in total utility from consuming one more unit, (o.t.c.)
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Law of diminishing marginal utility
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Consumer Equilibrium
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the condition in which an individual consumer’s budget is spent and the last dollar spent on each good yields the same marginal utility; therefore, utility is maximized.
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the condition in which an individual consumer’s budget is spent and the last dollar spent on each good yields the same marginal utility; therefore, utility is maximized.
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Consumer Equilibrium
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Marginal Valuation
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the dollar value of the marginal utility derived from consuming each additional unit of a good.
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the dollar value of the marginal utility derived from consuming each additional unit of a good.
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Marginal Valuation
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